“In light of the fact that virtually all promissory notes taken by banks, mortgage companies, etc., were sold at some time after the “closing” for the respective transactions — without the right in discovery to physically inspect, and photocopy the original wet-ink instrument, (production of the original instrument), meaning that the bank, mortgage company, etc., retained physical possession of the NOTE, standing in court to enforce the instrument in foreclosure is impossible pursuant to the Uniform Commercial Code. (UCC). This is the law behind — “Show Me the Note!” Statutory Requirements For Establishing The Right To Enforce An Instrument 1. Prove status of holder of the instrument. (UCC § 3-301(i)); or 2. Prove status of non-holder in possession of the instrument who has the rights of a holder. (UCC § 3-301(ii)); or 3. Prove status of being entitled to enforce the instrument as a person not in possession of the instrument pursuant to UCC § 3-309 or UCC § 3-418(d). (NOTE is lost, stolen, destroyed). UCC § 3-309, requirements. a. Prove possession of the instrument and entitled to enforce it when loss of possession occurred. (UCC § 3-309(a)(1)). i. If illegality or fraud were involved in the original transaction, it cannot be proved that the person is entitled to enforce the instrument.(See UCC § 3-305. DEFENSES) b. Prove non-possession of the NOTE is NOT the result of a transfer. (UCC § 3-309(a)(2)). NOTE: If discovery shows that the instrument was sold by the person claiming the right to enforcement, a transfer occurred, and such person is NOT entitled to enforce the instrument. (See UCC § 3-309(a)(ii)). c. Prove that the person seeking enforcement cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process. (UCC § 3-309(a)(3)). NOTE: If discovery shows that the instrument was sold by the person claiming the right to enforcement, a transfer occurred, and such person is NOT entitled to enforce the instrument. (See UCC § 3-309(a)(ii)). d. A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. (UCC § 3-309(b)). **************** UCC § 3-309 Enforcement Of Lost, Destroyed, Or Stolen Instrument. (a) A person not in possession of an instrument is entitled to enforce the instrument if (1) the person seeking to enforce the instrument (A) was entitled to enforce the instrument when loss of possession occurred, or (B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred; (2) the loss of possession was NOT the result of a transfer by the person or a lawful seizure; and (3) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process. (b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.
Posted on: Sun, 25 Jan 2015 13:55:06 +0000
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